Admiral urges rethink on injury claim reforms

Lucy Burton

Sam Dean

THE boss of insurer Admiral has urged the Government to row back on changes to the rate used to calculate personal injury claims, warning that the country’s youngest drivers will be most affected by the “unnecessarily extreme” measures.

The Government is currently carrying out a consultation into the so-called “discount rate”, used to determine insurance payouts to those who have suffered life-changing injuries.

Earlier this year it changed the calculation from 2.5pc to minus 0.75pc in a move that shocked the industry. The decision is set to send premiums higher for car owners and cost the insurance industry millions.

David Stevens, the chief executive of Admiral, urged ministers to “move towards a halfway house between the old system in need of reform and the minus 0.75pc announced”, to help minimise damage to the market. “That’s particularly important because the impact on [the discount rate] Ogden is focused on younger drivers paying higher premiums,” he said. “These drivers need a car sometimes to access education and to access work.”

The insurer disappointed analysts with its results for the first half of the year, with profits subdued in part because of the impact of the rate change.

Shares in the group dropped 6pc to £20.47 yesterday, even though it posted a slight rise in pre-tax profits to £193m in the six months to June 30, up from £190m last year.